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Article 39 of the “Labor Contract Law” stipulates that where an employee has committed a serious breach of the employer’s rules and regulations, the employer could unilaterally terminate the labor contract without any compensation. According to this article, if an employer has listed the behaviors which shall be determined as a serious breach, then will the employer unilaterally terminate the labor contract without any risk? In practice, the answer is negative. In the “Guidance and Reference for Civil Trial” (Volume 1, 2012), the Supreme People’s Court points out that, “on the determination of a serious breach of the employer’s rules…

An automatic renewal clause is very common in the commercial contracts, in which the parties plan to keep a long-term cooperation, such as strategic cooperation agreements, lease contracts, intellectual property licensing agreements, and so on. Normally, such clause is a standardized clause, and many companies are used to ignore it. Take the case (2019) Jing 0108 Min Chu No. 22059 for example, Company J signed a “Cloud Service Agreement” with Company K. The agreement states that J provides cloud service to K; the agreement is valid for 1 year, if either party does not intend to extend the agreement, it…

We have discussed the salary for suspension in the last issue, and this time the topic is the period for suspension. When an employee is involved in a violation of internal rules and regulations, or suspected in a violation of laws and regulations, the employer may require the employee to be suspended for investigation; and the suspension period is determined case by case. The period may be several days, such as, in the case (2014) Su Zhong Min Zhong Zi No. 03635, it is 3 days; or several months, such as, in the case (2019) Jing 02 Min Zhong No.…

Company T sued Company E for trademark infringement. T required E to stop the infringement, compensate for the losses, in addition, it required E to publish an apology in its local newspaper. If the court held that E had infringed T’s trademark, whether it would support T’s request for an apology? The answer is negative. The “Patent Law” has listed the measures of assuming responsibility for infringement; however, the apology is not one of those measures. The reason is that a patent is a property right, which does not have personal attributes. Therefore, it is generally believed that such infringement…

In January 2018, Guo caused losses to the company due to work errors, and Guo was suspended from his work without wages. Later, the company unilaterally terminated the labor contract, and Guo claimed for the wages of the suspension period. In the end, the court held that the labor relationship was valid during the suspension period, so the company should pay the relevant wages. (See (2020) Ji 01 Min Zhong No. 1642). Such cases are not rare. In the event of an employee’s misconduct or work errors, in order to conduct the investigation without any obstacle, and prevent the employee…

Company A signed a purchase contract with Company B. Later then, Company B was merged by Company C. Because Company A had disputes with Company C, it was unwilling to do business with Company C. Then, whether Company A could refuse to do business with Company C?  Article 174 of the “Company Law” stipulates: “when a company is merged, the credits and debts of all parties to the merger shall be inherited by the surviving company or the newly established company”. Article 90 of the “Contract Law” stipulates: “If the parties merge after the contract is concluded, the merged legal…

In December 2016, a few days after Dong lost contact, the company terminated the labor contract for absenteeism. In April 2017, Dong was diagnosed with schizophrenia, and the doctor stated that the disease had begun in August 2016. Dong’s daughter claimed that the company had terminated the labor contract illegally. The Shanghai High People’s Court finally determined it was an illegal termination of the labor contract. ((2018) Hu Min Shen No.2313). In practice, if an employer has stipulated that absenteeism for a certain number of days, it could terminate the labor contract. Where an employee loses contact, normally the employer…